A breach of fiduciary duty in the context of estate planning is a serious matter that can have significant consequences for all parties involved.
Estate planning involves the creation of legal documents to manage and distribute a person’s assets after their death. This process often requires the involvement of different parties who owe a fiduciary duty to the individual and their beneficiaries, such as:
- Financial advisors
A fiduciary duty is a legal obligation that requires the person in a position of trust to act in the best interest of the person they represent. In the case of estate planning, this duty extends to the individual creating the estate plan (the testator) and their intended beneficiaries.
The fiduciary, such as an attorney or trustee, is expected to act with loyalty, honesty, and utmost care and fulfill their responsibilities.
Unfortunately, breaches of fiduciary duty can occur in estate planning, resulting in economic loss, legal disputes, and emotional turmoil for the beneficiaries. Common examples of breaches of fiduciary duty in estate planning include:
- Mismanagement of assets
- Failure to act promptly
- Conflicts of interest
When a breach of fiduciary duty occurs, beneficiaries have the right to take legal action to protect their interests. This may involve filing a lawsuit against the fiduciary to recover any financial losses, remove the fiduciary from their position, or seek other appropriate remedies.
To prevent breaches of fiduciary duty in estate planning, individuals should choose their fiduciaries carefully and regularly review their estate plans. Working with reputable professionals with a track record of ethical behavior and seeking independent legal advice can help ensure that a trustee’s fiduciary duty is upheld, and the estate plan is carried out as intended.